Cost of Credit Disclosure and Payday Loans
Financial and Consumer Services Commission
Overview
The Financial and Consumer Services Commission administers the Cost of Credit Disclosure and Payday Loans Act, which requires credit grantors, credit brokers and lessors who are involved in the negotiation of –or the extension of credit or leases for personal, family or household purposes – to register with the Financial and Consumer Services Commission. This applies to consumer loans and retail credit, mortgages, credit card transactions, leases and lines of credit.
The Cost of Credit Disclosure and Payday Loans Act also requires that any person offering, arranging or providing a payday loan must obtain a licence in New Brunswick from the Financial and Consumer Services Commission. If offering, arranging or providing payday loans at more than one location, a separate licence is required for each location and/or website.
Any consumer considering taking out a payday loan should ensure they are working with a licensed lender. Consumers can conduct a free search of the list of licensed payday lenders on the Financial and Consumer Services Commission’s Licensed Payday Lenders database.
Eligibility
Applicants wishing to obtain a payday lender licence under the Cost of Credit Disclosure and Payday Loans Act must submit a completed application through the Financial and Consumer Services Commission’s online portal. More information on the requirements to apply for a licence can be found here.
Description
The Cost of Credit Disclosure and Payday Loans Act protects consumers by ensuring that the true cost of borrowing is accurately disclosed to them. The disclosure must be clear in any contractual documents and advertising.
The Cost of Credit Disclosure and Payday Loans Act prohibits certain collection practices to prevent harassment, and prohibits penalties on prepayment of most consumer loans or leases.
The Cost of Credit Disclosure and Payday Loans Act authorizes the Financial and Consumer Services Commission to investigate complaints and perform audits where necessary. Failure to comply with the regulations constitutes an offence punishable under the Cost of Credit Disclosure and Payday Loans Act and may result in fines and administrative penalties.
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